Exchange Rate Regime Choice

There are many factors which can affect the choice of exchange rate regime. The M-F model and the impossible triangle theory give us the different results of policy coordination under different regimes. The macroeconomic structure and the micro-market structure and some political variables such as the credibility and the stability of government must be taken into account too when we make the choice.We can not define which one is preferable choice when we compare the fixed regime and the flexed regime. In fact, the absolute fixed regime or free flexed regime is not exist.The doctrine of the original sin and the fear of floating hypothesis developed the theory of exchange rate regime. The hypothesis of the vanishing intermediate regime was a new theory which had resulted in many disagreements. But it gave us a clue about the importance of Currency League in International Currency System.The choice of exchange rate regime is a dynamic course. Different regimes coexist and transform to each other. No single currency regime is suitable for all counties or at all times.The exchange rate regime in China is peg in dollar. This regime is acceptable at present. But it has some defects too. Considered the economic and political condition ,.we must change the currency regime to management float regime actively. This article gives a route and an occasion of the regime's transition.